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Bitcoin price seems to have completed its retest of the broken symmetrical triangle resistance and might be due to resume its climb from here. Applying the Fib extension tool on this correction shows that the 50% level lines up with the swing high, which might be the first take-profit point for bulls.
The 100 SMA is still above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. In other words, the climb is more likely to gain traction than to reverse. The gap between the indicators is widening too, which reflects strengthening bullish momentum. However, price has fallen below the faster moving average to signal a bit of selling pressure.
RSI already hit the oversold region and started to turn higher to reflect a return in bullish pressure. This could be enough to take bitcoin at least until the 38.2% extension at $4,152.40. Stronger bullish momentum could lift it to the 61.8% level at $4,361 or the 78.6% level near the $4,500 major psychological mark. The full extension is located near the $4,700 major psychological resistance.
Stochastic also climbed out of the oversold region to signal that bullish pressure is in play as well. A bullish divergence can also be seen as price made higher lows while stochastic had lower lows.
Bitcoin has been on a solid run in the previous week so many believe that the recent drop was merely a much-needed correction from the climb. Then again, many are disappointed that bitcoin did not reach the “$5,000 level in 10 days” forecast from earlier on.
Still, there is a lot to look forward to, particularly the launch of Fidelity’s institutional platform next month that could draw more inflows from institutions like banks and big hedge funds. This is widely expected to usher in a strong rebound for bitcoin as volumes and volatility pickup, with retail investors not wanting to get left behind.
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